Exhibit
10.45


 


WARRANT


 


THIS WARRANT IS SUBJECT
TO RESTRICTIONS ON TRANSFER AS SET FORTH IN SECTION 9 HEREIN.  THE WARRANT EVIDENCED OR CONSTITUTED HEREBY,
AND ALL SHARES OF COMMON STOCK ISSUABLE HEREUNDER, HAVE BEEN AND WILL BE ISSUED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“THE ACT”),
AND EXCEPT AS OTHERWISE PROVIDED HEREIN MAY NOT BE SOLD, OFFERED FOR SALE,
TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE ACT UNLESS
EITHER (A) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT
REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR
(B) THE SALE OF SUCH SECURITIES IS MADE PURSUANT TO SECURITIES AND
EXCHANGE COMMISSION RULE 144.


 


WARRANT TO PURCHASE
COMMON STOCK 


 


OF


 


BROADVISION, INC.


 


July 7, 2004


 


THIS
CERTIFIES THAT, for value received, PACIFIC SHORES INVESTORS,
LLC, a Delaware limited liability company (“Holder”), is entitled,
subject to the terms and conditions of this Warrant, at any time or from time
to time after July 7, 2004 (the “Effective Date”), to purchase from
BROADVISION, INC., a Delaware
corporation (the “Company”), up to Seven Hundred Thousand
(700,000) shares of common stock, par value $0.0001 per share (the “Common
Stock”), of the Company, at a price of $5.00 per share (the “Exercise
Price”).  This Warrant shall expire
at 5:00 p.m. Pacific time on July 6, 2009 (the “Expiration Date”).  Both the number of shares of Common Stock
purchasable upon exercise of this Warrant and the Exercise Price are further
subject to adjustment and change as provided herein.


 


1.             CERTAIN DEFINITIONS.  As used in this Warrant the following terms
shall have the following respective meanings:


 


“Acquisition”
means (a) any sale or exchange of the capital stock by the stockholders of
the Company in one transaction or series of related transactions where more
than 50% of the outstanding voting power of the Company is acquired by a person
or entity or group of related persons or entities; or (b) any
reorganization, consolidation, merger or similar transaction or series of
related transactions (each, a “Combination Transaction”) in which the Company
is a constituent corporation or is a party if, as a result of such Combination
Transaction, the voting securities of the Company that are outstanding
immediately prior to the consummation of such Combination Transaction do not
represent, or are not converted into, securities of the surviving corporation
of such Combination


 

















 


Transaction (or such surviving corporation’s parent corporation if the
surviving corporation is owned by the parent corporation) that, immediately
after the consummation of such Combination Transaction, together possess at
least fifty percent (50%) of the total voting power of all securities of such
surviving corporation (or its parent corporation, if applicable) that are
outstanding immediately after the consummation of such Combination Transaction;
or (c) a sale of all or substantially all of the assets of the Company,
that is followed by the distribution of the proceeds to the Company’s
stockholders.  For these purposes, an
“Acquisition for Cash” means any Acquisition where the holders of the Company’s
securities before the transaction receive solely cash consideration in connection
with such transaction.


 


“Act” shall
mean the Securities Act of 1933, as amended.


 


“Common Stock”
shall mean the Common Stock of the Company and any other securities at any time
receivable or issuable upon exercise of this Warrant.


 


“Fair Market Value”
of a share of Common Stock as of a particular date shall mean:


 


(a)           If traded on a
securities exchange, the Nasdaq Bulletin Board, the Nasdaq Small Cap Market or
the Nasdaq National Market, as the case may be, the Fair Market Value shall be
deemed to be the average of the closing prices of the Common Stock of the
Company on such exchange or market over the five (5) business days ending
immediately prior to the applicable date of valuation;


 


(b)           If actively traded
over-the-counter, the Fair Market Value shall be deemed to be the average of
the closing bid prices over the thirty (30) day period ending immediately
prior to the applicable date of valuation; and


 


(c)           If there is no active
public market, the Fair Market Value shall be the value as determined in good
faith by the Company’s Board of Directors upon a review of relevant factors,
including due consideration of the Holders’ determination of the value of the
Company based on what a third party would pay for the shares in an arm’s length
transaction, unless prior to such date the Company has become subject to a
binding agreement for an Acquisition, in which case the current fair market
value of the Common Stock shall be deemed to be the value received by the
holders of the Common Stock for each share thereof pursuant to the Company’s
Acquisition.


 


“Holder”
shall include the original Holder and any subsequent Holder.


 


“SEC” shall
mean the Securities and Exchange Commission.


 


2.             EXERCISE OF WARRANT


 


2.1.          Rights to Exercise


 


(a)           The rights represented
by this Warrant may be exercised at any time on or after the first anniversary
of the Effective Date and up through the Expiration Date, in whole or in part,
by (i) the surrender of this Warrant (with the purchase form attached
hereto as Exhibit A
properly executed) at the principal executive office of the Company (or such
other office or agency of the Company as it may designate by notice in writing
to the Holder at the address of the Holder


 


2

















 


appearing on the books of the Company); and (ii) payment to the
Company of the exercise price then in effect (subject to the provisions of
subsection (c) below) for the number of shares specified in the above-mentioned
purchase form together with applicable stock transfer taxes, if any.  All payments under this Warrant may be made
by cash (including wire transfer), check or cancellation of indebtedness.  This Warrant shall be deemed to have been
exercised, in whole or in part to the extent specified, immediately prior to
the close of business on the date this Warrant is surrendered and payment is
made in accordance with the foregoing provisions of this Section 2, and
the person or persons in whose name or names the certificates for the shares
shall be issuable upon such exercise shall become the holder or holders of
record or such shares at that time and date. 
The shares and the certificates for the shares so purchased shall be
delivered to the Holder within a reasonable time, not exceeding two
(2) business days, after the rights represented by this Warrant shall have
been so exercised.


 


(b)           Rights to Exercise during the
First 12 months.  Notwithstanding
anything to the contrary contained in paragraph 2.1, the Holder may nonetheless
elect to exercise this Warrant in whole or in part during the first 12 months
following the Effective Date in connection with an Acquisition of the Company
initiated (whether by the Company or the acquiring entity) or completed during
that period.


 


(c)           Net Exercise Provisions.  Further notwithstanding anything to the
contrary contained in paragraph 2.1, the Holder may elect to exercise this
Warrant in whole or in part by receiving shares equal to the value (as
determined below) of this Warrant, or any part hereof, upon surrender of this
Warrant at the principal office of the Company together with notice of such
election in which event the Company shall issue to the Holder a number of
shares computed using the following formula:


 


	
  X =

  	
   

  	
  Y(A-B)

  	
   

  
	
   

  	
   

  	
  A

  	
   

  



 


Where X =             the number of shares
to be issued to the Holder (provided however that in no event shall X equal
less than zero);


 


Y =                          the
number of shares issuable upon exercise of this Warrant;


 


A =                         the
current Fair Market Value of one share of Common Stock calculated as of the
last business day immediately preceding the exercise of this Warrant;


 


B =                          the
Exercise Price of this Warrant (as adjusted as provided herein).


 


2.2.          Stock Certificates;
Fractional Shares.  As soon as
practicable on or after the date of an exercise of this Warrant, the Company
shall issue and deliver to the person or persons entitled to receive the same a
certificate or certificates for the number of whole shares of Common Stock
issuable upon such exercise, together with cash in lieu of any fraction of a
share equal to such fraction of the current Fair Market Value of one whole
share of Common Stock as of the date of exercise of this Warrant.  No fractional shares or scrip representing
fractional shares shall be issued upon an exercise of this Warrant.


 


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2.3.          Partial Exercise;
Effective Date of Exercise.  In case
of any partial exercise of this Warrant, the Company shall cancel this Warrant
upon surrender hereof and shall execute and deliver a new Warrant of like tenor
and date for the balance of the shares of Common Stock purchasable
hereunder.  This Warrant shall be deemed
to have been exercised immediately prior to the close of business on the date
of its surrender for exercise as provided above.  The person entitled to receive the shares of Common Stock
issuable upon exercise of this Warrant shall be treated for all purposes as the
holder of record of such shares as of the close of business on the date the
Holder is deemed to have exercised this Warrant.


 


3.             VALID ISSUANCE; TAXES.  All shares of Common Stock issued upon the
exercise of this Warrant shall be validly issued, fully paid and
non-assessable, and the Company shall pay all taxes and other governmental
charges that may be imposed in respect of the issue or delivery thereof.  The Company shall not be required to pay any
tax or other charge imposed in connection with any transfer involved in the
issuance of any certificate for shares of Common Stock in any name other than
that of the Holder of this Warrant, and in such case the Company shall not be
required to issue or deliver any stock certificate or security until such tax
or other charge has been paid, or it has been established to the Company’s
reasonable satisfaction that no tax or other charge is due.


 


4.             ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES.  The number of shares of Common Stock
issuable upon exercise of this Warrant (or any shares of stock or other
securities or property receivable or issuable upon exercise of this Warrant)
and the Exercise Price are subject to adjustment upon occurrence of the
following events:


 


4.1.          Adjustment for Stock
Splits, Stock Subdivisions or Combinations of Shares.  The Exercise Price of this Warrant shall be
proportionally decreased and the number of shares of Common Stock issuable upon
exercise of this Warrant (or any shares of stock or other securities at the
time issuable upon exercise of this Warrant) shall be proportionally increased
to reflect any stock split or subdivision of the Company’s Common Stock.  The Exercise Price of this Warrant shall be
proportionally increased and the number of shares of Common Stock issuable upon
exercise of this Warrant (or any shares of stock or other securities at the
time issuable upon exercise of this Warrant) shall be proportionally decreased
to reflect any combination of the Company’s Common Stock.


 


4.2.          Adjustment for
Dividends or Distributions of Stock or Other Securities or Property.  In case the Company shall make or issue, or
shall fix a record date for the determination of eligible holders entitled to
receive, a dividend or other distribution with respect to the Common Stock (or
any shares of stock or other securities at the time issuable upon exercise of
the Warrant) payable in (a) securities of the Company or (b) assets
(excluding cash dividends paid or payable solely out of retained earnings),
then, in each such case, the Holder of this Warrant on exercise hereof at any
time after the consummation, effective date or record date of such dividend or
other distribution, shall receive, in addition to the shares of Common Stock
(or such other stock or securities) issuable on such exercise prior to such
date, and without the payment of additional consideration therefor, the
securities or such other assets of the Company to which such Holder would have
been entitled upon such date if such Holder had exercised this Warrant on the
date hereof and had thereafter, during the period from the date hereof to and
including the date of such exercise, retained such shares and/or all other
additional stock available by it as aforesaid during such period giving effect
to all adjustments called for by this Section 4.


 


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4.3.          Reclassification.  If the Company, by reclassification of
securities or otherwise, shall change any of the securities as to which
purchase rights under this Warrant exist into the same or a different number of
securities of any other class or classes, this Warrant shall thereafter
represent the right to acquire such number and kind of securities as would have
been issuable as the result of such change with respect to the securities that
were subject to the purchase rights under this Warrant immediately prior to
such reclassification or other change and the Exercise Price therefore shall be
appropriately adjusted, all subject to further adjustment as provided in this
Section 4.  No adjustment shall be
made pursuant to this Section 4.3 upon any conversion or redemption of the
Common Stock that is the subject of Section 4.5.


 


4.4.          Adjustment for
Capital Reorganization, Merger or Consolidation.  In the case of any reclassification or change of the outstanding
securities of the Company or of any reorganization of the Company (or of any
other corporation, the stock or other securities of which are at the time
receivable on the exercise of this Warrant), after the date hereof, or in case,
after such date, the Company (or any such corporation) shall consolidate with
or merge with or into another corporation or convey its capital stock or all or
substantially all of its assets to another corporation or other entity, then,
in each such case, Holder, upon any exercise of this Warrant, at any time after
the consummation of such reclassification, change, reorganization,
consolidation, merger, or conveyance, shall be entitled to receive, in lieu of
the stock or other securities and property receivable upon the exercise of this
Warrant prior to such consummation, the stock or other securities or property
to which such Holder would have been entitled upon the consummation of such
reclassification, change, reorganization, consolidation, merger or conveyance
if Holder had exercised the Warrant immediately prior thereto, all subject to
further adjustment as provided in this Section 4, and the successor or purchasing
corporation or other entity in such reclassification, change, reorganization,
consolidation, merger or conveyance (if not the Company) shall duly execute and
deliver to Holder a supplement hereto acknowledging such corporation’s or
entity’s obligations under the Warrant; and in each such case, the terms of the
Warrant (including the exercisability, transfer and adjustment provisions of
the Warrant) shall be applicable to the shares of stock or other securities or
property receivable upon the exercise of the Warrant after the consummation of
such reclassification, change, reorganization, consolidation, merger or
conveyance.


 


4.5.          Other Events.  If any event occurs of the type contemplated
by the provisions of this Section 4, but not expressly provided for by such
provisions or definition (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity
features), then the Company’s Board of Directors in its reasonable judgment
shall make an appropriate adjustment in the number of shares of Common Stock
obtainable upon exercise of this Warrant so as to protect the rights of the
Holder.


 


4.6.          Conversion of Common
Stock.  In case all or any portion
of the authorized and outstanding shares of Common Stock of the Company are
redeemed or converted or reclassified into other securities or property
pursuant to the Company’s Certificate of Incorporation or otherwise, or the
Common Stock otherwise ceases to exist, then, in such case, the Holder of this
Warrant, upon exercise hereof at any time after the date on which the Common
Stock is so redeemed or converted, reclassified or ceases to exist (the “Termination
Date”), shall receive, in lieu of the number of shares of Common Stock that
would have been issuable upon such exercise immediately prior to the
Termination Date, the securities or property that would have been received if
this Warrant had been exercised in full and the Common Stock received thereupon
had been simultaneously converted


 


5

















 


immediately prior to the Termination Date, all subject to further
adjustment as provided in this Warrant. 
Additionally, the Exercise Price shall be immediately adjusted to equal
the quotient obtained by dividing (x) the aggregate Exercise Price of the
maximum number of shares of Common Stock for which this Warrant was exercisable
immediately prior to the Termination Date by (y) the number of shares of
Common Stock of the Company for which this Warrant is exercisable immediately
after the Termination Date, all subject to further adjustment as provided
herein.


 


5.             REPRESENTATIONS AND WARRANTIES.  The Company hereby represents and warrants
to the Holder that:  (a) the
Company has all requisite power and authority to enter into and perform its
obligations under this Warrant; (b) the execution and delivery by the
Company of this Warrant and the performance of all obligations of the Company
hereunder have been duly authorized by all necessary board and stockholder
actions; (c) all Common Stock which may be issued upon the exercise of the
purchase right represented by this Warrant shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, and free of any liens
and encumbrances except for restrictions on transfer provided for herein or
under applicable federal and state securities laws; and (d) the Company is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation. 
The Company’s capitalization information is set forth in Exhibit C hereto.


 


6.             CERTIFICATE AS TO ADJUSTMENTS.  In each case of any adjustment in the
Exercise Price, or number or type of shares issuable upon exercise of this
Warrant, the Chief Financial Officer or Controller of the Company shall compute
such adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment and showing in detail the facts upon
which such adjustment is based, including a statement of the adjusted Exercise
Price.  The Company shall promptly send
(by facsimile and by either first class mail, postage prepaid or overnight
delivery) a copy of each such certificate to the Holder.


 


7.             LOSS OR MUTILATION.  Upon receipt of evidence reasonably
satisfactory to the Company of the ownership of and the loss, theft,
destruction or mutilation of this Warrant, and of indemnity reasonably
satisfactory to it (but without the requirement of a bond), and (in the case of
mutilation) upon surrender and cancellation of this Warrant, the Company will
execute and deliver in lieu thereof a new Warrant of like tenor as the lost,
stolen, destroyed or mutilated Warrant.


 


8.             RESERVATION OF COMMON STOCK.  The Company hereby covenants that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant such number of shares of Common Stock or other shares of capital stock
of the Company as are from time to time issuable upon exercise of this Warrant
and, from time to time, will take all steps necessary to amend its Certificate
of Incorporation to provide sufficient reserves of shares of Common Stock or
other shares of capital stock issuable upon exercise of this Warrant (and
shares of its Common Stock for issuance on conversion of such capital stock).  All such shares shall be duly authorized,
and when issued upon such exercise, shall be validly issued, fully paid and
non-assessable, free and clear of all liens, security interests, charges and
other encumbrances or restrictions on sale and free and clear of all preemptive
rights, except encumbrances or restrictions arising under federal or state
securities laws.  Issuance of this
Warrant shall constitute full authority to the Company’s officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for shares of Common Stock and other capital stock upon
the exercise of this Warrant.


 


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9.             TRANSFER AND EXCHANGE.  Subject to compliance with all applicable
securities laws, this Warrant and all rights hereunder may be transferred,
assigned and/or pledged by the Holder with the prior written consent of the
Company, which consent may not be unreasonably withheld, to any person, in
whole or in part, except that Company consent shall not be required (i) in
the case of a Holder who is a partnership or limited liability company, to a
partner (including a limited partner) of such partnership or a member of such
limited liability company; or (ii) to any parent or subsidiary of any Holder
or parent of any Holder or any successor or permitted assignee of any Holder or
any parent of any Holder; or (iii) to any “affiliate” of a Holder (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934), or (iv) to any
entity or person otherwise related organizationally to a Holder; or (v) to a
lender or a lender participant of such Holder, or to a lender or a lender
participant of an affiliate of such Holder. 
The Company will record such transfer on its books maintained for such
purpose at the principal office of the Company referred to above, upon delivery
of the form of Assignment attached hereto as Exhibit B (the “Assignment”), duly executed by
the Holder, surrender of this Warrant properly endorsed at the principal office
of the Company and payment of any necessary transfer tax or other governmental
charge imposed upon such transfer.  No
transfer may be made until and unless such transferee acknowledges and agrees
to the provisions set forth in Section 11 herein.  Upon any partial transfer, the Company will
issue and deliver to the Holder a new Warrant or Warrants with respect to the
portion of this Warrant not so transferred. 
Each taker and holder of this Warrant, by taking or holding the same,
consents and agrees that when this Warrant shall have been so endorsed, the
person in possession of this Warrant may be treated by the Company, and all
other persons dealing with this Warrant, as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby,
any notice to the contrary notwithstanding; provided, however that until a
transfer of this Warrant is duly registered on the books of the Company, the
Company may treat the Holder in whose name the Warrant is registered on the
books and records maintained by the Company as the owner for all purposes.


 


10.          REGISTRATION RIGHTS AND OBLIGATIONS.


 


10.1.        Certain Definitions.  For purposes of this Section 10.1:


 


(a)           Offering.  The term “Offering”
with respect to any of the Company’s Common Stock means the Registration of
such Common Stock, whether underwritten or not, for sale to the public.


 


(b)           Person.  The term “Person”
means a corporation, an association, a trust, a partnership, a joint venture,
an organization, a business, a limited liability company, an individual, a
government or political subdivision thereof or a governmental body.


 


(c)           Registration.  The terms “register,”
“registered” and “registration” refer to a registration
effected by preparing and filing a Registration Statement in compliance with
the Act, as amended (the “Securities Act”),
and the declaration or ordering of effectiveness of such registration
statement.


 


(d)           Registrable
Securities.  The term “Registrable Securities” means (i) the
shares of Common Stock (the “Shares”) that are issuable to the Holder upon
exercise of the Warrant, and (ii) any shares of the Company’s Common Stock that
may be issued as a dividend or other distribution (including shares of the
Company’s Common Stock issued in a subdivision and split of


 


7

















 


the Company’s outstanding Common Stock) with respect to, or in exchange
for, or in replacement of, shares of the Company’s Common Stock described in
clauses (i) or (ii) of this Section 10.1(d); excluding in all cases, however,
from the definition of “Registrable Securities” any such shares of the
Company’s Common Stock that are:  (w)
transferred by a person in a transaction in which rights under this Warrant
with respect to such shares of the Company’s Common Stock are not assigned in
accordance with the terms of this Warrant; (x) sold pursuant to a registration
statement filed pursuant to this Warrant; or (y) sold pursuant to Rule 144
promulgated under the Securities Act or otherwise sold to the public.  Only shares of the Company’s Common Stock
shall be Registrable Securities.  Except
as provided in clause (ii) of the first sentence of this Section 10.1(d),
without limitation, the term “Registrable Securities” does not include any
shares of the Company’s Common Stock that were not issued in connection with
the exercise of this Warrant.


 


(e)           Registration
Statement.  The term “Registration Statement” means any
registration statement which covers any of the Shares of Holder pursuant to the
provisions of this Warrant, all amendments and supplements to such Registration
Statement, including post-effective amendments, all exhibits and all material
incorporated by reference in such Registration Statement.


 


10.2.        Company’s
Obligations to Register Securities.  The
Company agrees that effective as of the first anniversary of the Effective
Date, and continuously thereafter until the Expiration Date, it will have in
place one or more effective Registration Statement(s) covering the resale of
any and all Registrable Securities issued or issuable pursuant to this Warrant
and further, that the Company will maintain the effectiveness of such
Registration Statement(s) (including without limitation, filing post-effective
amendments, appropriate qualifications under applicable blue sky or other state
securities laws, and appropriate compliance with the Securities Act) so that
any and all Registrable Securities may be sold and/or distributed pursuant to
such Registration Statement(s) from time to time and at any time beginning as
of one year following the Effective Date and ending as of the Expiration
Date.  Solely by way of explanation, and
not of limitation, the Company’s obligation to file and/or maintain the
effectiveness of such Registration Statement(s) shall be an independent and
on-going obligation, and shall continue regardless of any specific request or
notification by any Holder or any minimum number of Registrable Securities
remaining outstanding, unless or until the Holders of a majority of the
outstanding Registrable Securities shall provide a written request to the
Company that it cease maintaining the effectiveness of such Registration
Statement(s) as to the Registrable Securities covered by such request.  The Parties agree that any breach by the
Company of its obligation to register set forth in this Section 10.2 will
constitute a material breach of this Agreement, and further that upon such
breach, Holder will be entitled to seek all available remedies at law or in
equity.


 


10.3.        The Company agrees to
indemnify and hold harmless Holder and its directors, officers, employees,
agents, partners, members, controlling persons and affiliates from and against
any losses, claims, damages or liabilities they may incur arising out of any
untrue or alleged untrue statement of material fact contained in such
Registration Statement(s), or any amendment or supplement thereto, or arising
out of or based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or arising out of any violation of the Securities Act
or the Securities Exchange Act of 1934, as amended, in connection therewith,
and will reimburse Holder and its directors, officers, employees, agents,
partners, members, controlling persons and affiliates for any legal or other


 


8

















 


expenses reasonably incurred in connection with investigating or
defending any such action or claim as such expenses are incurred.


 


All expenses incurred by
the Company in complying with Section 10.2 (other than the underwriter’s
discounts and commissions), including, without limitation, all registration and
filing fees (including all expenses incident to filing with the National
Association of Securities Dealers, Inc.), fees and expenses of complying with
securities and blue sky laws (except for blue sky expenses required by law to
be borne by the sellers), expense allowances of the underwriters, printing
expenses, fees and disbursements of counsel or other advisor to the Company,
and of the accountants, are herein called “Registration Expenses.” All
fees and expenses of counsel for any selling Holder and all underwriting
discounts and commissions applicable to the eligible securities covered by any
such registration, are herein called “Selling Expenses” The Company
shall pay all Registration Expenses in connection with each registration
pursuant to Section 10.2.  All Selling
Expenses and blue sky expenses required by law to be borne by sellers in
connection with each registration pursuant to Section 10.2 shall be borne by
the seller or sellers therein in proportion to the number of eligible
securities included by each in such registration or in such other proportions
as they may agree upon.


 


11.          RESTRICTIONS ON TRANSFER.  The Holder, by acceptance hereof, agrees
that, absent an effective registration statement filed with the SEC under the
Act, covering the disposition or sale of this Warrant or the Common Stock
issued or issuable upon exercise hereof or the Common Stock issuable upon
conversion thereof, as the case may be, and registration or qualification under
applicable state securities laws, such Holder will not sell, transfer, pledge,
or hypothecate any or all such Warrants or Common Stock, as the case may be, unless
either (i) the Company has received an opinion of counsel, in form and
substance reasonably satisfactory to the Company, to the effect that such
registration is not required in connection with such disposition, it being
understood and agreed that no legal opinion shall be required for transfers to
entities set forth in Section 9(i) through (v), inclusive, or (ii) the
sale of such securities is made pursuant to SEC Rule 144.


 


12.          NOTICE OF CERTAIN EVENTS.  In case of any Acquisition or of the
voluntary or involuntary dissolution, liquidation or winding up of the Company,
then in each such event the Company shall cause to be given to the Holder at
least twenty (20) days prior notice of such event.


 


13.          COMPLIANCE WITH SECURITIES LAWS.  By acceptance of this Warrant, the Holder
hereby represents, warrants and covenants that it is an “accredited investor”
as that term is defined in Regulation D promulgated under the Act, that
any shares of stock purchased upon exercise of this Warrant or acquired upon conversion
thereof shall be acquired for investment only and not with a view to, or for
sale in connection with, any distribution thereof; that the Holder has had such
opportunity as such Holder has deemed adequate to obtain from representatives
of the Company such information as is necessary to permit the Holder to
evaluate the merits and risks of its investment in the Company; that the Holder
is able to bear the economic risk of holding such shares as may be acquired
pursuant to the exercise of this Warrant for an indefinite period; that the
Holder understands that the shares of stock acquired pursuant to the exercise
of this Warrant or acquired upon conversion thereof will not be registered
under the Act (unless otherwise required pursuant to exercise by the Holder of
the registration rights, if any, previously granted to the Holder) and will be
“restricted securities” within the meaning of Rule 144 under the Act and
that the exemption from registration under Rule 144 will not be available
for at least one (1) year from the date of exercise of


 


9

















 


this Warrant, subject to any special treatment by the SEC for exercise
of this Warrant pursuant to Section 2.2, and even then will not be
available unless a public market then exists for the stock, adequate
information concerning the Company is then available to the public, and other
terms and conditions of Rule 144 are complied with; and that all stock
certificates representing shares of stock issued to the Holder upon exercise of
this Warrant or upon conversion of such shares may have affixed thereto a
legend substantially in the following form:


 


THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE ACT, AS AMENDED, OR UNDER
THE SECURITIES LAWS OF ANY STATE.  THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY
NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM.  INVESTORS SHOULD BE AWARE
THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.  THE ISSUER
OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE
IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.


 


14.          NO RIGHTS OR LIABILITIES AS STOCKHOLDERS.  This Warrant shall not entitle the Holder to
any voting rights or other rights as a stockholder of the Company.  In the absence of affirmative action by such
Holder to purchase Common Stock by exercise of this Warrant, no provisions of
this Warrant, and no enumeration herein of the rights or privileges of the
Holder hereof shall cause such Holder hereof to be a stockholder of the Company
for any purpose.


 


15.          NOTICES. 
All notices and other communications required or permitted hereunder
shall be in writing and shall be mailed by registered or certified mail,
postage prepaid, return receipt requested, or by telecopier, or by email or
otherwise delivered by hand or by messenger, addressed or telecopied to the
person to whom such notice or communication is being given at its address set
forth after its signature hereto.  In
order to be effective, a copy of any notice or communication sent by telecopier
or email must be sent by registered or certified mail, postage prepaid, return
receipt requested, or delivered personally to the person to whom such notice or
communication is being at its address set forth after its signature
hereto.  If notice is provided by mail,
notice shall be deemed to be given five (5) business days after proper
deposit with the United States mail or nationally recognized overnight courier,
or immediately upon personally delivery thereof, to person to whom such notice
or communication is being at such address. 
If notice is provided by telecopier, notice shall be deemed to be given
upon confirmation by the telecopier machine of the receipt of such notice at the
telecopier number provided above.  If notice
is provided by email, notice shall be deemed to be given upon confirmation by
the sender’s email program of the receipt of such notice at the email address
provided after the signature of the person to whom such notice or communication
is being.  The addresses set forth after
the signatures hereto may be changed by written notice complying with the terms
of this Section 15.


 


16.          HEADINGS. 
The headings in this Warrant are for purposes of convenience in
reference only, and shall not be deemed to constitute a part hereof.


 


10

















 


17.          LAW GOVERNING.  This Warrant shall be construed and enforced in accordance with,
and governed by, the laws of the State of California.


 


18.          NO IMPAIRMENT.  The Company will not, by amendment of its Certificate of
Incorporation or bylaws, or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale of assets or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder of this
Warrant against impairment.  Without
limiting the generality of the foregoing, the Company (a) will not
increase the par value of any shares of stock issuable upon the exercise of
this Warrant above the amount payable therefor upon such exercise, and
(b) will take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and non-assessable
shares of Common Stock upon exercise of this Warrant.


 


19.          NOTICES OF RECORD DATE.  In case:


 


19.1.        the Company shall take a
record of the holders of its Common Stock (or other stock or securities at the
time receivable upon the exercise of this Warrant), for the purpose of
entitling them to receive any dividend or other distribution, or any right to
subscribe for or purchase any shares of stock of any class or any other
securities or to receive any other right; or


 


19.2.        of any consolidation or
merger of the Company with or into another corporation, any capital
reorganization of the Company, any reclassification of the capital stock of the
Company, or any conveyance of all or substantially all of the assets of the
Company to another corporation in which holders of the Company’s stock are to
receive stock, securities or property of another corporation; or


 


19.3.        of any voluntary dissolution,
liquidation or winding-up of the Company;


 


19.4.        of any redemption of any
outstanding capital stock of the Company; or


 


19.5.        of any registration of the
Company’s Common Stock under applicable securities laws or of the filing of a
registration statement relating thereto;


 


then, and in each such
case, the Company will mail or cause to be mailed to the Holder of this Warrant
a notice specifying, as the case may be, (i) the date on which a record is
to be taken for the purpose of such dividend, distribution or right, or
(ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation, winding-up,
redemption or conversion is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such stock or securities
as at the time are receivable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. 
Such notice shall be delivered at least thirty (30) days prior to
the date therein specified.


 


20.          SEVERABILITY.  If any term, provision, covenant or restriction of this Warrant
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms,


 


11

















 


provisions, covenants and restrictions of this Warrant shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.


 


21.          COUNTERPARTS.  For the convenience of the parties, any number of counterparts of
this Warrant may be executed by the parties hereto and each such executed
counterpart shall be, and shall be deemed to be, an original instrument.


 


22.          NO INCONSISTENT AGREEMENTS.  The Company will not on or after the date of
this Warrant enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Holder of this Warrant or otherwise
conflicts with the provisions hereof. 
The rights granted to the Holder hereunder do not in any way conflict
with and are not inconsistent with the rights granted to holders of the Company’s
securities under any other agreements, except rights that have been waived.


 


23.          SATURDAYS, SUNDAYS AND HOLIDAYS.  If the Expiration Date falls on a Saturday,
Sunday or legal holiday, the Expiration Date shall automatically be extended
until 5:00 p.m. on the next business day.


 


12

















 


IN
WITNESS WHEREOF, the parties hereto have executed this
Warrant as of the Effective as of July 7, 2004.


 


 


	
  BROADVISION,
  INC., a Delaware

  corporation

  	
   

  	
  PACIFIC
  SHORES INVESTORS, LLC, a

  Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Pehong Chen

  	
   

  	
  By: Pacific Shores
  Mezzanine, LLC, a Delaware

  
	
  Name:

  	
  Pehong Chen

  	
   

  	
  limited liability
  company, its sole member

  
	
  Title:

  	
  Chairman, CEO &
  President

  	
   

  	
   

  
	
   

  	
   

  	
  By: Pacific Shores
  Junior Mezz, LLC, a

  Delaware limited liability company, its sole

  member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Pacific Shores
  Junior Mezz Managers, LLC,

  a Delaware limited liability company, its sole

  member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Pacific Shores
  Development, LLC, a

  Delaware limited liability company, its sole

  member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Technology Land
  LLC, a California limited

  liability company, Operating Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joseph K. Paul

  
	
   

  	
   

  	
  Name:  Joseph K. Paul

  
	
   

  	
   

  	
  Title:  Sole Managing Member

  
	
   

  	
   

  	
   

  
	
  Address for Notices:

  	
   

  	
  Address for Notices:

  
	
   

  	
   

  	
   

  
	
  BroadVision, Inc.

  	
   

  	
  Pacific Shores
  Investors, LLC

  
	
  585 Broadway

  	
   

  	
  c/o Paul Holdings, Inc.

  
	
  Redwood City,
  California 94063

  	
   

  	
  350 California Street,
  Suite 1905

  
	
  Attention:  Legal Department

  	
   

  	
  San Francisco,
  California 94111-4074

  
	
  Telephone:
  (650) 261-5100

  	
   

  	
  Attention:  Mr. Jay Paul

  
	
  Facsimile:  (650) 298-7440

  	
   

  	
  Telephone:
  (415) 263.7400

  
	
   

  	
   

  	
  Facsimile:  (415) 362.0698

  
							



 


13

















 


EXHIBIT A


 


NOTICE OF EXERCISE


 


(To be executed upon exercise of Warrant)


 


	
   

  	
   

  	
  WARRANT
  NO.         

  



 


The undersigned hereby irrevocably
elects to exercise the right of purchase represented by the within Warrant
Certificate for, and to purchase thereunder, the securities of BroadVision,
Inc. by tendering herewith payment of the exercise price in full in the form of
cash, a certified or official bank check in same-day funds, or cancellation of
indebtedness in the amount of
$                        
for                   
such securities.


 


Please issue a
certificate or certificates for such securities in the name of, and pay any cash
for any fractional share to (please print name, address and social security
number):


 


	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  



 


Note:  The above signature should correspond
exactly with the name on the first page of this Warrant Certificate or with the
name of the assignee appearing in the assignment form below.


 


If said number of shares
shall not be all the shares purchasable under the within Warrant Certificate, a
new Warrant Certificate is to be issued in the name of said undersigned for the
balance remaining of the shares purchasable thereunder rounded up to the next
higher whole number of shares.


 


1

















 


EXHIBIT B


 


ASSIGNMENT


 


	
  (To be
  executed only upon assignment of Warrant Certificate)

  	
   

  	
  WARRANT
  NO.         

  



 


For value received, hereby sells, assigns and transfers unto
                                                
the within Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint                                                         
attorney, to transfer said Warrant Certificate on the books of the within-named
Company with respect to the number of Warrants set forth below, with full power
of substitution in the premises:


 


	
  Name(s) of Assignee(s)

  	
   

  	
  Address

  	
   

  	
  # of
  Warrants

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


And if said number of Warrants shall not be all the Warrants
represented by the Warrant Certificate, a new Warrant Certificate is to be
issued in the name of said undersigned for the balance remaining of the
Warrants registered by said Warrant Certificate.


 


	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  



 


Notice:  The signature to the foregoing Assignment
must correspond to the name as written upon the face of this security in every
particular, without alteration or any change whatsoever; signature(s) must be
guaranteed by an eligible guarantor institution (banks, stock brokers, savings
and loan associations and credit unions with membership in an approved
signature guarantee medallion program) pursuant to Securities and Exchange
Commission Rule 17Ad-15.


 


1

















 


EXHIBIT
C


 


COMPANY
CAPITALIZATION INFORMATION


 


BroadVision, Inc. has two classes of shares authorized: 2,000,000,000
shares of common stock, $.00001 par value per share, of which 33,602,320 shares
were issued and outstanding as of the close of business on August 4, 2004; and
10,000,000 shares of preferred stock, $.00001 par value per share, of which no
shares are outstanding.


 


As of June 30, 2004, there were 10,661,111 shares of common stock
reserved for issuance under all of the company’s stock option plans, of which
5,824,643 were reserved for issuance under options outstanding as of that date.


 


As of June 30, 2004, there were 892,230 shares of common stock reserved
for future issuance under BroadVision’s employee stock purchase plan.


 


As of December 31, 2003, there were warrants outstanding to acquire
9,628 shares of common stock at an average price of $188 per share.  These warrants were issued in 1997 and 2000
in connection with revenue transactions.


 


1